idea channel developement report...
SUMMER INTERNSHIP PROJECT REPORT 2008-2010 Corporate Guide Mr. Yugal Kishore Asst. Marketing Head
Submitted By Abhishek Khare 2008MBA-01
ABV-IIITM, Gwalior !dea, GWALIOR
ACKNOWLEDGEMENT This report bears the imprint of many people. Right from the experienced staff of Idea Cellular Ltd, to the staff of Atal Bihari Vajpayee – Indian Institute of Information Technology and Management without whose support and guidance I would have not got the unique opportunity to successfully complete my internship in this esteemed organization. I would like to thank Mr. Amaljeet Singh, who allow me to do this project in Idea Cellular Ltd successfully. I take this opportunity to express my deep gratitude to all the employees of, Idea, Gwalior. Also I am indebted for the rich guidance, knowledge and suggestions provided by my guide, Mr. Yugal Kishore who took sincere efforts and illustrated the Marketing Concept and channel development in Idea Cellular Ltd, with their vast knowledge in the field, which helped me in carrying out my internship. Last but not least, I also thank all those people whom I met in the industry during my internship and helped me to accomplish my assignments in the most efficient and effective manner.
Khare !dea, GWALIOR
Table of Content 1)
industry……………………………………….7-17 Telecom Industry in India History of Indian Telecommunications Classification of Telecommunication services The Key players in the Telecom Market in India
Market Share of the Telecom Company in India 3)
Cellular…………………………………………18-26 Introduction Our Service Areas Established Service Areas New Service Areas
Board of Directors
Corporate Leadership Team Circle Heads Brand Information
Definition of Research Types and Techniques Tools used Limitation of the study
Data Analysis &
Interpretation………………………………….32-39 Questionnaires for the customer
6) Telecom Market Share in Gwalior……………………………..40-45 !dea, GWALIOR
7) Distribution channel of idea……………………………………….46-56
Selecting members within a channel
Motivating Channel Members
Sales Organization structure Distribution channel of idea in Gwalior Visit with TSM Customer Interaction when visit with FOS
Finding…………………………………………62-64 10) Bibliography………………………………………………………….6 5-67
Objective Of the Project
OBJECTIVES OF THE PROJECT
1. To find out the perception of the general people towards the land line & Mobile phone.
2. To find out the telecom market share of different companies in Gwalior.
3. To find out the consumer satisfaction towards the different plans offered by
4. Managing the distribution channel of idea cellular.
Overview of telecom industry
Telecom Industry in India
The telecom industry is one of the fastest growing industries in India. India has nearly 200 million telephone lines making it the third largest network in the world !dea, GWALIOR
after China and USA. With a growth rate of 45%, Indian telecom industry has
- Much of the growth in Asia Pacific Wireless Telecommunication Market is spurred by
the growth in demand in countries like India and China.
India‘s mobile phone subscriber base is growing at a rate of 82.2%.
China is the biggest market in Asia Pacific with a subscriber base of 48% of the
total Subscribers in Asia Pacific. Compared to that India’s share in Asia Pacific Mobile
Phone market is 6.4%. Considering the fact that India and China have
comparable populations, India’s low mobile penetration offers huge
History of Indian Telecommunications
Started in 1851 when the first operational land lines were laid by the government near Calcutta (seat of British power). Telephone services were introduced in India in 1881. In 1883 telephone services were merged with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After independence in 1947, all the foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications. Telecom sector was considered as a strategic service and the government
In 1990s, telecommunications sector benefited from the general opening up of the economy. Also, examples of telecom revolution in many other countries, which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a change process finally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom sector.
Telecommunication sector in India can be divided into two segments: Fixed Service Provider (FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic long distance and international long distance services. The state operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic services. Private sector services are presently available in selective urban areas, and collectively account for less than 5 per cent of subscriptions. However, private services focus on the business/corporate sector, and offer reliable, high- end services, such as leased lines, ISDN, closed user group and videoconferencing. Cellular services can be further divided into two categories: Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector is dominated by Airtel, Vodafone-Hutch, and Idea Cellular, while the CDMA sector is dominated by Reliance and Tata Indicom. Opening up of international and domestic long distance telephony services are the major growth drivers for cellular industry. Cellular operators get substantial revenue from these services, and compensate them for reduction in tariffs on airtime, which along with rental was the main source of revenue. The reduction in tariffs for airtime, national long distance, international long distance, and handset prices has driven demand. India added 13.82 million new mobile subscribers in February 09, down from 15.41 million a month earlier, according to Indian telecom regulator TRAI. India’s total number of mobile subscribers rose to 376.12 million at end-February from 362.30 million at the end of January. While China added 18.55 million new mobile phone subscribers in the first two months of 2009 and total wireless subscriber base stood at 659.78 million as of endFebruary 2009. China Mobile subscribers sent 607.1 billion SMSs last year, up by over 100 billion from the last year, and downloaded more than 76 million full music tracks.
India’s GSM subscribers totaled 277.5 million by end-February, accounting for nearly 75% of total wireless market share. According to figures released by the Cellular Operators Association of India (COAI), GSM players added 10.84 million new subscribers in March, taking total GSM subscriptions for the fiscal year to 288.3 million. The numbers exclude subscriptions for Reliance Communications, the CDMA service provider that recently launched GSM services, because the company does not reveal GSM numbers separately. If the estimates of 2.5 million to 2.7 million GSM subscribers for Reliance Communications are added, the total monthly increase for GSM subscriptions will be 13.54 million. At this rate, India’s GSM subscriber base is growing at more than double the monthly growth rate of China, which is adding around 6 million customers every month. “Though March has more days and companies push sales at the end of the financial year, we expect to see monthly incremental growth of 14 to 15 million consumers in 2009-10. Our estimate is that mobile penetration will go up from 35% currently to 50% by the end of this financial year,” said TV Ramachandran, COAI secretarygeneral. COAI has predicted that India will have around 500 million GSM subscribers by the end of 2009-10 and over 800 million by 2012. The country would hit the one billion markets in a few years after that. COMPANY
USERS AT MARCH 2009
AIRTEL VODAFONE BSNL IDEA AIRCEL RELIANCE TELECOM MTNL BPL
93923248 68768998 46684049 43022799 18478325 11145176 04176676 02164211
This table shows the present status of GSM players in India, where Bhari Airtel is leading then at 2nd position Voafone-Essar group is present after that Bharat Sanchar Nigam Limited with customer of 4 Cr is present. Idea Cellular with 43022799 is present then Aircel, Reliance GSM, MTNL and BPL are at 5th, 6th, 7th and 8th position respectively. The pie chart below shows that percentage of market capture in terms of customer.
Market CaptureMTNL by telecom players Reliance 4%
2% Idea 16%
The Chart shows that in GSM service 35% of the total market captured by Airtel, 25% market captured by Vodafone, 17% market captured by BSNL, 16% market captured by Idea and then rest are follows. Market research firm Gartner Inc. Forecasts India will spend 739 billion rupees ($16.34 billion) on telecom services and equipment in 2006, up 27.3 percent from this year. Forecasted Growth of Indian
Telecom Spending Through 2009:-
CAGR 2004- AGR
Telecom spending 501,0 581,1 739,9 1,419,0 23.1% 09
Source: Gartner Inc.
Revenue of Telecom Industry in India:-
Continuing its robust growth, the Indian telecom industry saw its gross revenues growing 2.6 percent to more than Rs.40, 000 crore in the quarter ending March 31, said the sectoral watchdog here on Monday.
According to the Telecom Regulatory Authority of India (TRAI), the gross revenue of the telecom sector for the period under review stood at Rs.40, 444.66 crore, as against Rs.39, 408 crore in the previous quarter. The state-owned operators -Bharat Sanchar Nigam and Mahan agar Telephone Nigam -- together earned Rs.10, 599 crore, while private players raked in Rs.29, 846 crore. TRAI said India's total subscriber base reached 429.72 million by March-end, as against 384.79 million for the
Tele-density, too, increased 36.98 percent from 33.23 percent in the previous quarter. The subscriber base of wireless and wire line increased to 391.76 million and 37.96 million respectively. However, rural wire line decreased from 10.68 million to 10.58 !dea, GWALIOR
million, a decrease of 0.93 percent. According to the watchdog, the ARPUs (average revenue per user) continued to fall, decreasing 6.82 percent from Rs.220 in
The number of Internet wire line subscribers increased 5.3 percent to 13.54 million in the fourth quarter as against 12.85 million in the same period a year before.
Percentage of Total Revenue in Q2 BSNL & MTNL 26%
Private Players 74%
Sales of cellular companies in India (Jun 09):Sales in Crore 9040
Gross Profit cellular companies in India (Jun 09):-
ProfitIn Crore 4032 2620
715 123 Idea
Classification of Telecommunication services
1. Basic services 2. Cellular services 3. Internet Service Provider (ISP)
The Key players in the Telecom Market in India Cellular Service provider: 1.
mark Tele density reaches 21.20%
The total number of telephone subscribers has reached 241.02 million at the end of August 2007 as compared to 232.87 million in July 2007. The overall teledensity has increased to 21.20% in August 2007 as compared to 20.52% in July 2007.
In the wireless segment, 8.31 million subscribers have been added in August 2007 while 8.06 million subscribers were added in July 2007. The total wireless subscribers (GSM, CDMA & WLL (F)) base reaches 201.29 million at the end of August 2007.
The wire line segment subscriber base stood at 39.73 million with a decrease of 0.16 million at the end of August 2007. Circle wise wire line subscriber base of service providers is given at following chart.
Market Share of the Telecom Company in India !dea, GWALIOR
Introduction Of Idea Cellular
As India's leading GSM Mobile Services operator, IDEA Cellular has licenses to operate in 11 circles. With a customer base of over 17 million, IDEA Cellular has operations in Delhi, Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal, Haryana, UP-West, Himachal Pradesh and Kerala. IDEA Cellular's footprint currently covers approximately 45% of India's population and over 50% of the potential telecom-market.
As a leader in Value Added Services, Innovation is central to IDEA's VAS Factory. It is the first cellular company to launch music messaging with 'Cellular Jockey', 'Background Tones', 'Group Talk', a voice portal with 'Say IDEA' and a complete suite of Mobile Email Services.
Idea Cellular is a wireless telephony company operating in various states in India. It initially started in 1995 as a join venture between the Tatas, Aditya Birla Group and AT&T by merging Tata Cellular and Birla AT&T Communications. Initially having a very limited footprint in the GSM arena, the acquisition of Escotel in 2004 gave Idea a truly pan-India presence covering Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttar Pradesh (East and West), Haryana, Kerala, Rajasthan and Delhi (inclusive of NCR). The company has its retail outlets under the "Idea n' U" banner. The company has also been the first to offer flexible tariff plans for prepaid customers. It also offers GPRS services in urban areas. IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in March2007. IIDEA Cellular is a leading GSM mobile service operator with pan India licenses. With a customer base of over 44 million in 17 service areas, operations are soon expected to start in Chennai Metro; Kolkata & West Bengal, North East & Assam, and J&K. !dea, GWALIOR
A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the distinction of offering the most customer friendly and competitive Pre Paid offerings, for the first time in India, in an increasingly segmented market. From basic voice & Short Message Service (SMS) services to high-end value added services such as Mobile TV, Games etc - IDEA is seen as an innovative, customerfocusedbrand. IDEA 'Women's Card' caters to the special needs of women on the move, and 'Youth Card' covers the emerging youth segment. IDEA 'My Gang' the widely popular community user group product recently bagged the prestigious 'Golden Peacock Award 2008' under the Most Innovative Product category at the "19th World Congress on Total Quality".
A brand known for many firsts, IDEA was the first to launch GPRS and EDGE in India. IDEA has partnered with Research in Motion (RIM) to offer Blackberry services on
its network. IDEA 'Net Setter'- Plug & Play, EDGE
enabled USB Data Card offers affordable data connectivity with faster speed and consistency.
IDEA offers seamless coverage to roaming customers traveling to any part of
country, as well as to international traveling customers across over 200 countries. IDEA Cellular has partnership with over 400 operators worldwide to ensure that customers are always connected while on the move, across the globe.
IDEA has received several national and international recognitions for its
breaking innovations in mobile telephony products & services. It won the GSM Association Award for "Best Billing and Customer Care Solution" for 2 consecutive years. It was awarded "Mobile Operator of the Year Award - India" for 2007 and 2008 at the Annual Asian Mobile News Awards.
Our Service Areas !dea, GWALIOR
The Indian telecommunications market for mobile services is divided into 22 "Service Areas" classified into "Metro", Category "A", Category "B" and Category "C" service areas by the Government of India. These classifications are based principally on a Service Area's revenue generating potential. Our 17 operational Service Areas are broken up into Established and New Service Areas
Established Service Areas The established service areas are Delhi, Andhra Pradesh, Gujarat, Maharashtra, Haryana, Kerala, Madhya Pradesh and Uttar Pradesh (West). Licenses for the Maharashtra and Gujarat Service Areas were awarded in December 1995, with network rollout and commercial launch achieved in 1997. In January 2001 the mobile operations in Andhra Pradesh Service Area were integrated with IDEA through a merger with Tata Cellular Limited. In June 2001, the mobile operations in Madhya Pradesh Service Area were fully integrated with IDEA through an acquisition of RPG Cellcom Limited. In October 2001, the license for Delhi Service Area was acquired during the fourth mobile license auction, with network rollout and commercial launch in November 2002. In January 2004, Escotel Mobile Communications Private Limited ("Escotel"), was acquired with its original licenses in the Service Areas of Haryana, Uttar Pradesh (West) and Kerala. All these Service Areas were re-branded and integrated with IDEA in June 2004
New Service Areas The New Service Areas are Uttar Pradesh (East), Rajasthan, Himachal Pradesh, Bihar, Mumbai, Karnataka, Punjab, Orissa and Tamil Nadu ,Licenses for Uttar Pradesh (East), Rajasthan and Himachal Pradesh were acquired through the acquisition of Escotel (Escorts Telecommunications Limited).
Brand Idea was launched in Karnataka and Punjab, through the acquisition of Spice Communications. Idea launched its services in Mumbai and Bihar in 2008. The Mumbai launch was the largest Metro City launch in India. In Bihar, Idea acquired 500,000 subscribers in just over 100 days.
Holding Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular decided to sell its 32.9% stake in Idea. This stake was bought by both the Tatas and Birlas at 16.45% each. Tata's foray into the cellular market with its own subsidiary, Tata Indicom, a CDMA-based mobile provider, cropped differences between the Tatas and the Birlas. This dual holding by the Tatas also became a major reason for the delay in Idea being granted a license to operate in Mumbai. This was because as per Department of Telecom (DOT) license norms, one promoter could not have more than 10% stake in two companies operating in the same circle and Tata Indicom was already operating in Mumbai when Idea filed for its license. The Birla thus approached the DOT and sought its intervention, and the Tatas replied by saying that they would exit Idea but only for a good price. On April 10, 2006, the Aditya Birla Group announced its acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya Birla Novo, a company in-charge of the Birlas' new business initiatives, the remaining stake was acquired by Birla TMT holdings Private Ltd., an AV Birla family owned company. Currently, Birla Group holds 98.3% of the total shares of the company. Idea has successfully launched 3 more new circles (states) in India viz. Rajasthan, Himachal Pradesh and UP (East) to make itself a pan-India player. Recently, Idea got licenses to operate in Mumbai & Bihar. They are awaiting the spectrum from Dot.
Key People Board of Directors Mr. Kumar Mangalam Birla (Chairman) Smt. Rajashree Birla Mr. Saurabh Mishra Mr. Sanjeev Aga (Managing Director) Mr. Arun Thiagarajan Ms. Tarjani Vakil Mr. Mohan Gyani Mr. Gian Prakash Gupta Mr. R.C. Bhargava Mr. P. Murari Mr. Biswajit A. Subramanian Dr. Hansa Wijayasuriya
Management Team !dea, GWALIOR
Corporate Leadership Team Mr. Sanjeev Aga, Managing Director Mr. Akshaya Moondra, Chief Financial Officer Mr. Anil K. Tandan, Chief Technology Officer Mr. Prakash K. Paranjape, Chief Information Officer Mr. Pradeep Shrivastava, Chief Marketing Officer Mr. Navanit Narayan, Chief Service Delivery Officer Mr. Vinay K. Razdan, Chief Human Resource Officer Mr. Ramjet K. Mukarji, Chief Corporate Affairs Officer Mr. Rajesh K. Srivastava, Chief Materials & Procurement Officer Mr. Ambrish Jain, Director - Operations Mr. Himanshu Kapania, Director – Operations
The brand Idea It is almost impossible to disintegrate brand Idea from the corporate Idea. Brand values are the company values and vise versa. Brand Vision: It goes without saying that the brand vision of idea mirrors the company’s vision. The brand mission statement is...... To be the most customerfocused mobile service brand, continuously innovating to help liberate our customers from the shackles of time & space.
IDEA - Brand Values Innovate. Stimulate. Liberate.... It is these brand values, which have made us a formidable player in the telecom industry. Innovations that stimulate the customer and liberate him from the shackles of time and space are the core of our brand. This is what we strive for. Nothing more, nothing less, nothing else.
IDEA - Brand Mission
The India footprint Idea Anywhere connectivity - bringing India closer.
The Technology Advantage Idea Tomorrow's technology to enrich today.
The Customer Focus Idea Make a single interaction a lasting relationship.
The Employee Focus Idea Nurture the roots that nurture our ideas.
Brand Initiatives Our aim, through media buying and planning, is to create year round impact. With the objective of strengthening our brand, we work with strategic communication partners on campaigns like sponsorship of the Idea International Indian Film !dea, GWALIOR
Academy awards and the television programs “Idea Rocks India”, “Idea Star Singer” and “Idea Andhra Idol”. We seek engagement with subscribers on a variety of levels, from major celebrity fashion shows to small local events timed to coincide with new product offerings. Since August 2003, we have commissioned a Brand Track Index Study to evaluate the health of our brand. The Brand Track Index Study is a monthly study conducted by TNS, a marketing consultant engaged by us to evaluate our brand using face-to-face interviews on a random sample of mobile users a well as those intending to purchase mobiles within the next three months. According to the study our brand is perceived as “reliable/trustworthy” and one that “offers cheaper and good promotional offers”. We have improved our rating in the Brand Track Index calculated by the study in the past year reflecting, we believe, the growing strength of our brand. The main communication medium for the Idea brand is television, where we seek strategic Idea brand coverage in various formats. Billboards and hoardings are used as a secondary medium, customized for specific regional preferences to communicate effectively at the local level. We also use other mass communication media such as the press and radio to communicate price plans and other tactical and customer information. All our key initiatives are subjected to a rigorous testing and launch process to ensure accountability for all advertising spend and improve the chances of success of a new product. This process is followed up with extensive briefing of call center agents and sales personnel and real-time tracking of the impact of the communication and feedback from subscribers.
Definition of Research !dea, GWALIOR
The word research is derived from the Latin word meaning to know. It is a systematic and a replicable process, which identifies and defines problems, within specified boundaries. It employs well-designed method to collect the data and analyses the results. It disseminates the findings to contribute to generalize able knowledge. The characteristics of research presented below will be examined in greater details later are: Systematic
relationships between them, Collecting, organizing and evaluating data. Logical, so procedures can be duplicated or understood by others Empirical, so decisions are based on data collected Reductive, so it investigates a small sample which can be generalized to a larger population Replicable, so others may test the findings by repeating it. Discovering new facts or verify and test old facts. Developing new scientific tools, concepts and theories, which would facilitate to take decision? For the proper analysis of data simple statistical techniques such as percentage were use. It helps in making more generalization from the data available. The data which was collected from a sample of population was assumed to be representing entire population was interest. Demographic factors like age, income and educational background was used for the classification purpose.
Sample size For carrying out any research or study on any subject it is very difficult to cover even 10% of the total population. Therefore the sample size has to be decided for a meaningful conclusion. For designing the sample size, it was thought proper to cover a very small percentage of population in various age groups.
The method used for sample technique was non probability convenience sampling method. This method is used because it is known previously as to whether a particular person will be asked to fill the questionnaire. Convenient sampling is used because only those people will be asked to fill the questionnaires that were easily accessible and available to the researcher.
Considering the constraints, it was decided to conduct the study based on sample size of 100 people in specific age groups. Scientific method is not adopted in this study because of financial constraints and also because of lack of time; also the basic aim of doing the research is academic, hence most convenient way is selected.
TYPES & TECHNIQUES
The study conducted is a conclusive descriptive statistical study; the researcher comes to the decision which is precise and rational. The study is conclusive because after doing the study the researcher comes to a conclusion regarding the position of the brand in the minds of respondents of different firms groups. The study is statistical because throughout the study all the similar samples are selected and group together. All the similar responses are taken together as one and their percentages are calculated.
Thus, this, conclusive descriptive statistical study is the best study for this purpose as it provides the necessary information which is utilize to arrive at a concrete decision.
To know the response I have used the questionnaire method in sample survey. If one wishes to find what people think or know, the logical procedure is to ask them. This has lead marketing researchers to use the questionnaire technique for collecting data more than any other method. In this method questionnaire were distributed to the respondents and they were asked to answer the questions in the questionnaire. The questionnaires were structured non-disguised questionnaire because the questions, which the questionnaire contained, were arranged in a specific order besides every question asked was logical for the study, no question can be termed as irrelevant.
The questionnaire, were non-disguised because the questionnaire were constructed so that the objective is clear to the respondent. The respondents were aware of the objective. They knew why they asked to fill the questionnaire.
LIMITATIONS OF THE STUDY
The research will be conducted in a limited area.
The internet information can be irrelevant.
Time will be a major constraint.
The respondent will be limited so cannot be treated as a whole population.
The respondent may be biased.
Due to language problem it is possible that the respondents are not be able to understand the questionnaire and can cause misleading results.
Data Analysis & Interpretation
Questionnaires for the customer DATA ANALYSIS & INTERPRETATION
Q1. Which cellular service do you use?
Percentage of respondents
TATA indicom 5% BSNL 16%
Reliance 17% idea 28%
Q2. Which service you r using? Options
Percentage of respondents
Q4. Are you using lifetime or general plan?
Percentage of respondents
Q5 Are you satisfied with the lifetime plan which you are using?
Percentage of respondents
Q6. Which facility attracts you most in the lifetime plan? !dea, GWALIOR
Percentage of respondents
Call Rates Massage 15% Tarrif 1% Validity 83%
Night Terrif 1%
Q7. Rate of the satisfaction level with the services of your present lifetime plan?
Option !dea, GWALIOR
Percentage of respondents Page 38
Highly dissatisfied 2%
Average 30% Satisfied 51%
8. Why you chose lifetime plan?
Percentage of respondents
For incoming purpose only
For money saving
For the facilities provided in the plan
0% For the facilities provided in the plan 29%
For incoming purpose only 23%
For money saving 48%
Telecom Market share in Gwalior
Here we have prepared some questionnaires from the retailer’s point of view and tried to find out the market share of the following telecom industry in Gwalior: 1. Idea 2. Smart 3. Airtel
Findings:In the survey of Gwalior city found this result by approaching different- different retailer who deals in the communication products and find out result in Gwalior city with the help of questionnaire. This finding is based on only last month result because we have to find out what is happened in last month after new launch of Vodafone in Gwalior. In chart-1 result shows that clearly that over 50% of the retailer pushes idea to the customer whereas Airtel is also good in Gwalior, 31% of the retailer pushes it.
Chart -2 shows about Customer choice. Idea is leading here with 41% while Vodafone (35%) shows a great fight in this because it is launch recently in Gwalior and providing some great offers to attract new customer for building it’s reputation and market in Gwalior. While Airtel seems to be at 3rd position with 22% of customers choose it. !dea, GWALIOR
Chart-3 shows about the company which care most customer and retailers, here also Idea has a big lead over other GSM service providers with 61% of retailer told idea is best and 33% told Airtel is best while Smart is very poor and Vodafone is new in market so it is difficult to tell about Vodafone.
MOST CARE Vodafone 2% Airtel 33%
Chart -4 shows about Most Recharge sold in last month, because of a good market and leading in customer in Gwalior Idea leads with 73%. Means 73% retails told that Idea recharges they sell most in last month whereas Airtel and Vodafone recharges sold only at 12 and 13 % shops.
RECHARGE SOLD Smart 0% Airtel 12%
Chart-5 shows the total no of activation of Sims in last month. Vodafone has done a great job with 1038 activation at approx 50 shops because of new exciting offers (99 value voucher which gives Unlimited calling to any Vodafone number in MP&CG for one months and many more).While idea is on 2 nd with 679 and Airtel on third with 496.Smart is at last with only 166 activation because of it’s poor network.
ACTIVATION 1038 679 496 166
Chart - 6 shows the overall rating given by retailer, which shows a close competition between Idea and Airtel but idea has rated more than Airtel. In this rating 1 is for highest and 5 is for lowest. Idea got 1.38, Airtel got 1.69, Smart got 3.9 and Vodafone got 2.9.
RATING BY RETAILER HIGHEST=1
3.9 2.9 1.38
Chart -7 shows average stock available at retailer. An idea has a good market and no of activations is also more than any other provider so retailers have more stock of idea than any others. Vodafone has facing some problems in stock so average stock of Vodafone is only 3, idea has average stock of 19, Airtel has 12 and Smart has 14.
AVG SIMS AVAILABE 19 12
Chart -8 shows average balance in forms of both i.e. electronic recharge and paper recharge available at retailer. Total number of idea customer is more in Gwalior so retailer has to make a huge balance for idea so average balance available at retailer of Idea is 6067 Rs, Airtel is also improving very quickly so it has average balance of 4493 Rs and smart and Vodafone has 3433 and 2798 Rs respectively. !dea, GWALIOR
AVG BALANCE AVAILABLE 6067 4493 3433 2798
Distribution Channel of Idea
Distribution channel of idea Introduction Distribution is all about getting your product/service to the right people at the right time with special consideration for profit and effectiveness. Successful marketing does not end when a business has developed a product/service and has found its appropriate target audience with a view to selling it at the 'right price'.
The next issue that needs to be faced is how they are going to distribute and sell this product/service to these people- the consumers.
When a product/service is purchased by a consumer, it may have been bought directly from the business, or it may have been through a number of intermediaries (wholesaler,
Small businesses need to acknowledge the different types of distribution channels to utilize sales potential. After reading the article, you may learn that you could increase sales or profit by using a different distribution channel to the one that you currently use.
Distribution channels are influenced largely by the type and size of the business and so some of the channels explained may not be feasible for your particular business. Consequently, you may take note that these channels could be adopted in the future to accommodate for any changes and to help your business grow.
Distribution Strategy And trusted to act Distribution strategy is influenced by the market structure, the firm's objectives, and its resources and of course it’s overall marketing strategy. All these factors are addressed in the section on selecting Distribution Channels. The first strategic decision is whether the distribution is to be: Intensive (with mass distribution into all outlets as in the case of confectionery); Selective (with carefully
chosen distributors e.g. specialty goods such as car repair kits); or Exclusive (with distribution restricted to up market outlets, as in the case of Gucci clothes). The next strategic decision clarifies the number of levels within a channel such as agents, distributors, wholesalers, retailers. In some Japanese markets there are many, many intermediaries involved. Next comes a sensitive strategic decision whether to go single channel or multichannel. Some producers, like Manchester United FC, use multi-channels - they use many different routes, direct and indirect, to bring their products to their customers. Multi-channel Systems like this are common where intensive distribution is required. So direct marketing is combined with indirect marketing through intermediaries. Then comes the next level of strategic decisions concerning strategic relationships and partnerships. Two common strategies are Vertical Marketing Systems and Horizontal Marketing Systems. Vertical Marketing Systems involve suppliers and intermediaries working closely together instead of against each other. They plan production and delivery schedules, quality levels, promotions and sometimes prices. Resources, like information, equipment and expertise, are shared. The system is usually managed by a dominant member, or 'channel captain'. VMS is more flexible than vertical integration where the manufacturer actually owns the distribution channel, for example, Doctor Martens boot manufacturers own their own retail store. Horizontal Marketing Systems occur where organizations operating on the same channel level (e.g. two suppliers or two retailers) co-operate. They then share their distribution expertise and distribution channels. This can speed up the time taken to penetrate the market. There is room for creative alliances here. See Southwestern Bell's alliance with Granada TV Shops in the Hall Of Fame. Resources available affect distribution strategy. Who can handle outbound logistics, marketing and sales, and servicing? Can the supplier afford to deliver small quantities, can it provide more trucks, can its sales force 'push' products into national retail chains? Can the organization deal with thousands, maybe even !dea, GWALIOR
millions of customers - can it cope? Does it want to devote huge resources here or would it prefer to utilize someone else's resources in return for a slice of the profits? Difficult marketing dilemmas which make distribution strategy both critical and interesting. The sections on Distribution Channels explore this in more detail.
Selecting members within a channel Having
decided to go through intermediaries the next question is whether to use
agents or distributors and also how many. Unlike distributors, agents don't hold stocks - they only act as sales agents finding customers, collecting orders and passing them on to the supplier in return for a percentage commission. How would you select a distributor or an agent? Here are some criteria: 1. Market Coverage, 2. Sales Forecast, 3. Cost, 4. Other Resources, 5. Profitability, 6. Control, 7. Motivation, 8. Reputation, 9. Competition, 10. Contracts 1. Market Coverage: - does the profile of existing customers match your target market profile? - is the number of customers big enough to meet the required distribution penetration? - is the existing sales force big enough to cover the territory? - are they dependant on a single individual? - are the existing delivery fleet and warehouse facilities adequate? 2. Sales Forecast: How many can they sell? What are their forecasts based upon? Do they give a 'best, worst and average' forecast? Will they invest in large stock commitment? Do they have budgets to run promotions? Some suppliers even ask their distributors for a marketing plan showing how they intend to market the supplier's products. 3. Cost: What will it cost in terms of discounts, commissions, stock investment and marketing support? !dea, GWALIOR
4. Other Resources: Does the target market require anything special such as technical advice, installation, quick deliveries, and instant availability? If so can the distributor provide it? 5. Profitability: How much profit will the distributor generate for the supplier? 6. Control: Do they have a reporting system in place? How do they deal with problems? How often is review meetings scheduled? Can you influence the way they present your products? 7. Motivation: Does the agent or distributor convey a sense of excitement and enthusiasm about the product? What about its sales force - what's their reaction? 8. Reputation: Has it got a good track record? This includes the number of years in business, growth and profit record, solvency, general stability and overall reliability. Is it dependant on one key player? 9. Competition: Do they distribute any competitor's products? 10. Contracts: Some distributors demand exclusivity. Some agreements tie the supplier in for certain periods of time. Check for flexibility in case things go wrong. The bottom line is: Can the agent or distributor be motivated, controlled and trusted? Motivated to sell your product among a range of others. Controlled to back results feed or change strategy if requested. As a reliable ambassador of your product?
Motivating Channel Members Imagine these three scenarios: !dea, GWALIOR
You are a producer of 'Grand Pens' a brand of fountain pens. A customer seeks advice from a pen shop on which pen to buy and the retailer strongly recommends yours. A customer asks a retailer, who stocks your pen, for another brand called 'Bad Pens'. The retailer recommends and offers your pen as superior. A retailer actively solicits business for you by asking customers buying other products to come and have a look at the exquisite 'Grand Pen'. This retailer is obviously very motivated. 'Mindshare', as it is called in the USA, has to do with how important your product is in the distributor's mind relative to the other lines they carry. Winning the battle for the distributor's share of mind can be more important than many other marketing strategies. It applies in industrial markets and consumer markets where intermediaries play important roles in the distribution channel. In reality, maintaining continually high levels of motivation among intermediaries presents a challenge. It requires a reasonable quality product, creative promotions, product training, joint visits between producer and distributor, co-operative advertising, merchandising and display. Most of these apply to agents as much as distributors and retailers. Keeping the intermediary stimulated is important. Positive motivators, like sales contests are preferred to negative motivators like sanctions such as reduced discounts and the threat of terminating the relationship. A positive reward works better than a negative punishment. Ideally there should be a shared sense of responsibility - a partnership - a strategic partnership. The supplier and intermediary are there to help each other. Vertical Marketing Systems are a good example. Clear communications, covering sales goals, review meetings, reporting procedures, marketing
improvements, all help. Regular contact through visits, review meetings, dinners, !dea, GWALIOR
competitions, newsletters, thank you letters, congratulatory awards all help to keep everyone working closely together. These are all non-financial incentives which provide a form of psychic income as opposed to financial income. That's not to say that financial incentives aren't useful motivators, it just means that there are other motivations there too. In fact the money spent on financial incentives is often spent more effectively when the sales person is rewarded with a plaque, a gold pen or a holiday in the Bahamas rather than just the cash which tends to get soaked up and lost in a sea of ordinary household daily expenditure. Non cash rewards appeal to the higher levels of Maslow's Hierarchy of Needs belonging, esteem and self actualization. Despite this, conflict can occur when too many distributors are appointed within close proximity of each other, or the producer engages in a multiple channel strategy of direct marketing as well as marketing through intermediaries. Carefully motivating distributors is vital if goods are to flow smoothly through the channel and reach satisfied customers
Sales Organization structure
ZBM (Gwalior Zone)
ASM ( West)
Distribution channel of idea in Gwalior
3.00 cr. per
3MAA VAISHNAB 4,28,571
4 JAI SHIV
6 RAJ SALES
Activations /month Retailers covered
Rs 75 Lakhs
D B Enterprises
Rs 1.25 cr
Rs 40 Lakhs
Understanding operation at distributor’s end (Prism, Activation) Runners – for collection documents FOS- collection, delivery, relationship building, communicating new schemes on day to day basis.
Billing system for Retailers Plan
Claim per 20 Rs
175 Page 56
25 to 49
10 to 24
1 to 9
Channel management Channel Management. Yet another sales and marketing phrase that is thrown around like everyone knows what it means. But so few companies really comprehend channel management in a way that really helps them. It’s really no wonder. Sales channels (being the conduits by which we distribute our products to the end-user) come in many shapes—from direct, to the web, to the traditional retail environment. And, we’re just doing whatever we can to get any business from any of them! But is that the most efficient and effective approach? !dea, GWALIOR
That’s where Channel Management comes in. Channel management, as a process by which a company creates formalized programs for selling and servicing customers within a specific channel, can really impact your business—and in a positive way! To get started, first segment your channels by like characteristics (their needs, buying patterns, success factors, etc.) and then customize a channel management program that includes: 1.
- Define the specific goals you have for each channel segment.
Consider your goals for the channel as whole as well as individual accounts. And, remember to consider your goals for both acquisition and retention. 2.
- Construct well-defined polices for administering the accounts
within this channel. Be sure to keep the unique characteristics of each segment in mind when defining policies for account set up, order management, product fulfillment, etc. 3.
- Identify which products in your offering are most suited for
each segment and create appropriate messaging. Also, determine where your up sell opportunities lie. 4.
- Design support programs for your
channel that meet THEIR needs, not what your idea of their needs are. To do this, you should start by asking your customers within this segment, “how can we best support you in the selling and marketing of our products?” That being
advertising, seasonal promotions, and merchandising. Again, this is not a one-size fits all, so be diligent about addressing this segment’s SPECIFIC needs in these areas. Defining a channel management strategy for each segment allows you to be more effective within each segment, while gaining efficiency at the same time. Still, maintaining brand consistency across all channel segments is critical to your longterm success. So find a good balance between customization and brand consistency and you’ll be on your way to successful channel management.
Visit with TSM
We met with distributor & FOS and made understand that how to deal with retailers and how to sale our product and how to follow our channel perfectly and effectively and how to gave them satisfaction with company polices.
Areas Covered: Bada ,Murar,Hazira
23 retailers covered
Tasks Handled: Relationship Building, Issues Handling, Report generation, details about new schemes, Target achieved status
Idea Branding poor at some stores ( Visit by Airtel Sales Head)
We went to distributor point where we saw there were some people (FOS & distributor) who had a chain by which they worked together. Every FOS had particular market in that market they collected money and gave them sim card and paper Boucher& e-Boucher and gave that money to the distribute point.
Customer Interaction when visit with FOS
We went to new retailer with FOS and convince them to joint with telecom market, and gave them some beautiful offer to started their business with low amount !dea, GWALIOR
Tasks: Distribution of Stocks (SIMs, Vtopup), revenue collection, issue handling, collecting documents
Areas Covered:fruit mandi, Hazira
Description of the process started
This is the description of the process of distribution of the SIM and recharches and during the whole process our work was to manage the channel and by managing the channel to increase the revenue of the outlets.
Observation and Findings !dea, GWALIOR
OBSERVATION & FINDINGS
55% of the people use only mobile, and 40% of respondents use both the services & only 5% people use the telephone service. It shows the popularity of cellular phone services.
34% of respondents are using the idea services, which is the highest percentage of users of cellular phone. Airtel takes 2nd place in Gwalior with 28% of users. Then comes reliance and BSNL, and tata indicom having least customers in the Bhopal.
Prepaid service is most popular in the cellular services with 95% of customers. The remained uses postpaid services.
In current situation 73% of respondents are using lifetime plans, where the rest are using general plan of the cellular companies.
64% of respondents are satisfied with the call rates of the lifetime plans; it is because telecom companies have slashed their call rates few months ago. Still in this situation 36% of respondents did not satisfy with the call rates which service they are using.
In the lifetime plan of cellular companies most of the respondents are using this service because of its validity period with 83% of answer. Where 15% of people like this services because of its call rates.
78% of customer satisfied with the lifetime plans of cellular companies, and which are not satisfy with the service they are mostly BSNL and TATA indicom users.
Most of the people are using lifetime services because of money savings with the percentage of 48. Where 29% of people like this service because of the facilities provided by the operators. And 23% of people are using this service because of incoming only.
In Gwalior it is found that idea is the market leader in the lifetime plan segment. People like the lifetime plans provided by the companies. And airtel having 2 nd highest customers in Gwalior. TATA indicom having least customers in Gwalior, where Reliance and BSNL having almost equal percent of customer
But they are not aware about the bound of cellular companies with TRAI, that cellular companies can deliver their services till their license have validity, they have to renew it for providing further service.
In the lifetime plans, cellular companies should reduce the call rates.
They should provide other facilities like massage and minimum call rates in the same network.
They should make aware the customers that they have limited license period.
They should not take other hidden charges.
There should not be any compulsion that customer have to recharge their card in 180 days with certain amount. This is the main drawback of the lifetime validity plan.
Philip Kotler, ‘marketing management’ prentice Hall of India Pvt. Ltd. New Dehli.
C. R. Kothari ‘Research methodology’, vishwa publication, New Delhi.
Saxena Rajan ‘marketing management’ Tata McGraw-hill publication Co. Ltd. New Delhi.
H. V. Verma ‘marketing of services’ Global business press, New Delhi.
Business today magazine of February issue, 2008.
Web Resources: www.trai.gov.in http://www.tataindicom.com/t-aboutus-ttsl-organization.aspx http://www.rcom.co.in/webapp/Communications/rcom/Aboutus/aboutus_home.jsp http://www.ideacellular.com/IDEA.portal? _nfpb=true&_pageLabel=IDEA_Page_AboutIdea !dea, GWALIOR
http://www.bsnl.co.in/about.htm http://www.bsnl.co.in/service/tariff_excel_pre.htm http://188.8.131.52/utility/tariff.htm http://www.trai.gov.in/trai/upload/PressReleases/15/pr16jan06.pdf www.airtel.in http://www.rcom.co.in/webapp/Communications/rcom/index.jsp